St. James Builder Compares Production and Custom Builders

So you own a lot in a beautiful southeast NC coastal plantation community. Maybe your lot is in Winding River, or St. James Plantation, or Seawatch, or River Sea or Ocean Ridge or one of the other dozen or so nearby plantations. Maybe you are thinking about building in the next year or two, and you are starting to look at house plans as you shape your dream. You may have made a scheduled trip during one of the Parade of Homes tours to get a feel for the plantation southern style homes and pick up some additional ideas. But a question you might want to consider is, “Do you want to build with a custom builder or a production builder?” A custom builder offers virtually unlimited choices; whereas, a production builder makes the process easier because your choices are more limited.

First, it is important to note that because you own a lot, almost all builders will claim that they are custom builders simply because the house will be built on your land and not theirs. In other words, they are building the house you want on your property. The reason that this is viewed as custom is because the National Association of Home Builders (NAHB) lists as one criteria of a custom builder is “Build on land you own.” Or in other words, the house is not built on land the builder owns. However, NAHB does concede that “Some custom builders build on land they own.” I would also note that it is fair in today’s market to say that some production builders will build one of their production houses on the lot of the person for whom they are building. That does not necessarily make them a custom builder. Who owns the land seems to be one of the least important criteria of whether the builder you choose is a custom or production builder. What truly defines a custom builder from a production builder is the degree to which the homeowner has say about what the design of the house will be and what construction and finish selections will be included in the house.

And like most things in life there is a spectrum. At the one end is the production builder who offers the buyer very few options in return for a specific house at a known fixed cost. And at the other end is the custom builder who builds for buyers who want complete freedom to make changes and to make their own choices and selections about what goes into the house. This custom builder will provide advice based on his construction knowledge and experience and ensure the house meets all required codes, but the buyers will actively participate in the decision making of each phase of the project. The benefit to the buyer is that he/she gets the house with the exact features that they dreamed of owning. The drawback can be nailing down the exact cost prior to the start of construction. Most builders who build in Southport, NC plantation communities fall somewhere in between the two ends of this spectrum.

So the question is how to decide on which type of builder to choose. So let’s look at each in respect to cost, process and time.

The Production Builder

Cost: The first consideration is cost to build. Although there are some production builders that build fairly expensive houses; in general, a production builder will be less expensive than a custom builder as long as you limit yourself to his house design and the choices he offers. If you want any changes to the design of the house, you can expect an up charge for the cost of the added design and materials as well as a “change order” charge. The reason for a change order charge is because any changes to the production design adds time to the construction and also adds a greater chance for a mistake (which will need correcting). A production builder usually has built the houses in his collection dozens of times. Even his “new designs” are frequently simply an updated design from his portfolio. And he has usually worked to make his designs efficient to build. It is because of this that he knows how much material is needed for the house; it is because of this that he knows the exact cost of the house; it is because of this that his crew is familiar with the construction timelines and how to build the house. Therefore, any modifications (if allowed) will be expensive.

Process: You will find that making finish selections is easier with a production builder. The production builder often has a design studio where you will meet with his design consultant who shows you your choices of cabinets, counter tops, flooring, lighting, plumbing fixtures, etc. This actually simplifies the process by limiting the choices and allowing you to “shop” for myriad products in one location and within a few hours. The production builder will often offer different grades or levels from which to choose. For instance, he may have the level 1, 2, and 3 cabinets. Level 1 is included in the initial cost, whereas, level 2 and 3 have up charges associated with them. The more production-minded the builder is, the fewer selections the buyer will have to make. It simplifies the process for the buyer and reduces the possibility of errors for the builder. The drawback is if the buyer had her heart set on some feature such as a particular tile or hardwood or kitchen cabinet or counter top, and if the builder does not offer that in his selections and will not allow substitutions, then the buyer may be disappointed.

Time: Because the production builder has standardized his procedures (similar to the idea of an assembly line) to build a specific house and because his designs are often efficient to build, he can usually build the house in a shorter time frame than a custom builder. Also, for the buyer or lot owner, the time that they need to spend being engaged in the project is very limited once the contract is signed and the selections are made in the design center.

The Custom Builder

A custom builder works more closely with his buyers, and the buyers more actively participate in the decision making.

Cost: As mentioned above, in general, but not always, a custom house will cost more than the same size production house. Whether the custom buyer selects from the custom builder’s plan portfolio or selects a pre-designed plan from an architect or has a plan designed from scratch, the custom buyer can make changes and have the plan redrawn until it meets their needs. This adds cost. The custom buyer will also have the option of adding special features to the house such as added insulation, solar panels, reflective heat barriers, specially designed windows, etc. The custom buyer will only be limited by her budget. Because a custom house often is not necessarily the most efficient design and often includes more upper end architectural features, the construction costs of the house are usually more. The caveat is that a custom buyer may very well choose a very efficient design (and may in fact work with the builder to achieve that);and the custom buyer may be very satisfied with the builder’s standards of construction and not specify any costly additions. In which case, the custom home will not necessarily cost much more than a production home. The difference is the buyer is actively working with the custom builder, who is building exclusively to the buyer’s tastes, dreams and wishes.

Process: When building a custom home, the custom buyer will have myriad choices of what to put in the house. One example: The custom builder will usually send the buyer to a kitchen designer who will help with a custom lay-out for the way the buyer wants to use the kitchen. Cabinets are then selected from a range of styles, finishes and manufacturers or custom built. Again, the only limit will be the buyers budget. The custom buyer may very well choose modestly priced cabinetry or very high end custom cabinetry. Again the choice belongs to the buyer. The custom buyer’s kitchen design and cabinet selections are sent onto the builder who will use the information to make sure plumbing and electrical are placed according to the design. The custom process requires that the buyer meet with a variety of vendors and designers to select tile, hardwood, lighting, bath and kitchen fixtures, appliances, granite, etc. When working with a custom builder it is not usually a one-stop-design center that takes about 3-5 hours to make most selections. The benefit is that the buyer gets the house she wants with features she specifies.

Time: The entire custom building process generally takes more time from start to finish. One reason is that the design phase of building a custom home can take a few months. When building a production house there is essentially no design phase because it is simply selecting from the builder’s plans. Additional time is also needed because the house is custom. It is not one that the builder has built dozens of times. It very well may be more complex than the “efficient” design of the production builder. And because it is custom, it often requires more attention be paid to detail so mistakes are avoided. Obviously, building a custom home with a custom builder will require more time from the custom buyer—from providing input on the design, to making selections, to being on site at certain times during the construction so any further modifications can be made in a timely way which will save expensive changes later on.

Bill Epstein of W. Epstein Builders is a custom home builder in the Southport, NC area. He works personally with his customers to make sure they get the house they want and that it comes in on their budget. However, Bill notes, “There are advantages and disadvantages to building either a production home or a custom home. It is important to understand the differences and then make a decision based on what you want for your house, what you have designated as your budget, and how much time you want to invest in the project. Building a home should be fun, and the end result should make you feel good. After all, this is your home and it is a big investment. ”